Parents are spending less of their income on college costs and relying more on grants and scholarships than they did four years ago, according to a survey by Sallie Mae, the college lender. Parents of college students spent 37 percent of their income on college costs in 2009; that’s fallen to 27 percent this year.

“In this post-recession environment, families overwhelmingly believe in the dream of college, yet they are more realistic when it comes to how they pay for it,” said Jack Remondi, Sallie Mae’s chief executive.

Financial aid has increased sharply, rising to $6,355 from $4,859 in 2009.

Nearly 90 percent of parents said going to college is an investment, up from 80 percent in 2009.

Based on their enrollment and completion levels, study participants received grants of up to $1,300 for each of two semesters, and some received a similar-sized grant for a third (summer) semester. In each term, a student received $200 for registering for six or more credits, another $450 if still enrolled by the middle of the term, and $650 for achieving a grade of C or better (or the equivalent in developmental courses) in at least six credits.

Students who received the performance-based grants were likelier to enroll for that term, compared to the control group. But a year after students received grants, the average recipient hadn’t earned more credits or registered for more semesters.

“This suggests that while the program was effective when students were eligible for scholarships, the effects on enrollment and credits earned dissipated after the program ended,” the authors write. (The relatively small number of grant recipients at Hostos, a much smaller institution where the students are older and the program was housed in a student services division of the college, did accumulate more credits than their peers did, the authors note.)

While “bare bones” grants may not work, other forms of aid show promise at other colleges, said Reshma Patel, project and data manager for the Performance-Based Scholarship Demonstration Project. Studies are testing the effect of offering advising and tutoring services and larger scholarships. “We have had consistent findings across the sites, in terms of improvements in credit accumulation,” she said.

Families spent 9 percent less on college last year, according to a new Sallie Mae study. Spending had been going up each year, despite the recession, but more parents say they’re asking their children to choose lower-cost colleges, live at home or attend part-time.

Twenty-two percent of students from high-income families started at community colleges, up from only 12 percent the year before. Thirty-seven percent live at home.

While 51 percent of parents were “willing to stretch” financially to send a child to college, that’s down from 64 percent in 2010.

The steepest decline in college spending came among upper-income families, those earning six-figure incomes, whose average outlay declined from $31,245 in the 2010 academic year to $25,760 in 2011.

Low-income families (earning $35,000 or less) reported increased college spending, from $17,404 in 2010 to $19,888 in 2011. That is a counter-intuitive finding, given the massive increase in need-based aid of recent years. The report suggests the increase could simply reflect that a broader share of survey respondents have low incomes.

Grants and scholarships cover 33 percent of all college spending, up from 23 percent a year ago. Forty-six percent of families receive grants, up from 30 percent in a single year. Nearly half of middle-income families received grant aid.

Though Americans are wary of college spending, 90 percent of students say college is an investment in the future.

The share of families who “strongly agreed” with the statement that college is essential for earning (as opposed to learning) rose from 59 percent in 2010 to 70 percent in 2011.

. . . The share of students who said their primary motive for college was to earn more money rose sharply, a one-year jump from 61 percent to 75 percent.

Community College Spotlight is written by Joanne Jacobs. It provides a forum for discussion and debate about America’s community colleges, which are home to nearly half of all college students in the U.S.
Views expressed on the blog are those of Joanne Jacobs and do not necessarily reflect the views or opinions of The Hechinger Report or the Hechinger Institute. MORE